Alpha and Omega Semiconductor (NASDAQ:AOSL) stock has lost 12.8% to $39.41 in Friday afternoon trade, after the company warned COVID-19 lockdowns in Shanghai will impact revenue for Q4.
In reaction to the results, Benchmark lowered its price target on AOSL to $70 from $78, though analyst David Williams noted that demand momentum remained strong and the margin story remained intact.
B. Riley cut its price target on the company to $62 from $67, though analysts Craig Ellis and Michael Mani reiterated their buy rating on the company, citing Q3's strong sales and calling Q4's issues "temporal".
"In early April, a few of our employees (in China) tested positive for COVID19. And our operations were forced to shut down by the Shanghai government. Therefore, our ability to complete the assembly of our products and ship to customers were severely limited," said AOSL CEO Mike Chang on the earnings conference call.
At the end of April, the Shanghai government classified AOSL as an essential business and cleared it to restart operations.
"However, the pace at which we can resume for full operations still remains challenging due to defaults in bringing back labor workforce, procuring certain raw materials and resolving logistics bottlenecks," Chang said.
AOSL guided Q4 revenue to be about $190M (+\- $10M) vs estimates of $197.27M.